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Future of Elliott Aviation in Moline could hang on Illinois House Bill 3902

Quad City Times

Friday, November 8, 2019  |  Article  |  Jim Meenan

Legislature (56)

— The success or failure of Illinois House Bill 3902 has Elliott Aviation sitting on pins and needles.

 

If the bill is passed next week but vetoed by Illinois Gov. J.B. Pritzker, it could have serious consequences for the company's Moline operation.

 

According to company officials, if the law is vetoed by Pritzker, as he has said he will and the veto is not overridden, it could greatly affect the company which employs 273 people, about two-thirds of all the workers at the Quad City International Airport.

According to its website, Elliott Aviation has been providing aircraft sales, aviation services and innovative solutions since 1936. Its work includes aircraft sales and acquisitions, avionics, maintenance, parts, paint and interiors, accessories, aircraft management, charter services and three locations in the Midwest — Moline, Des Moines and Minneapolis.

 

The new law allows for an exemption to retroactively continue for the state not to tax aircraft parts.

 

Otherwise, there will be a 6.25% tax on all parts for mechanically inspecting/servicing and maintaining aircraft, avionics modifications, refurbishment of interiors, aircraft painting, landing gear and component overhauls, as well as on some technical products, company president Greg Sahr said.

 

“Our Moline location is our only facility that offers all of these services and is by far the largest of our three facilities,” he said.

 

It was thought that a 2009 law that went into affect in 2010 already provided the exemption, but about three months ago it was discovered that the law was covered by a 1994 sunset provision that should have taken effect Jan. 1, 2015. The tax could be collected dating back to 2015.

 

The reason the law is important is that 35 other states do not tax aircraft parts. Airlines and private jets would be able to take their aircraft to other states for repair, skipping Elliott Aviation and the Quad City International Airport because of the 6.25% sales tax.

 

Illinois Rep. Tony McCombie, R-Savanna, doesn't share the company's concern. She believes the state House and Senate will override the Governor’s veto. House Bill 3902 already passed by 113-0 with one legislator voting present. The Senate votes on the bill Wednesday.

 

While admitting you don’t really know for sure, until a veto vote is taken, McCombie noted the large margin it passed in the House. “If the votes stay the same, with him vetoing it, sometimes that changes the Dems’ side but I think we will be alright,” she said.

 

To override the veto, a three-fifths majority is needed in both the Illinois House and Senate. “I can’t imagine why it wouldn’t (be overridden),” McCombie said.

 

McCombie believes Pritzker’s stance is probably “an image thing."

 

“I think his comment was ‘I am not giving owners of jets tax breaks,’ or something like that,” she said. “I think it plays into what he is thinking about higher taxes for the one percent.”

 

Still, she believes if Pritzker vetoes the law, the veto won’t stand.

 

“I think once they understand it was an unintended consequence,” the veto will be overridden, she said Thursday. “For them (the 13 Illinois companies affected) to go back and have to pay, it was an oversight.